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Aspen Aerogels is abandoning a $325 million plant to make thermal barriers in Statesboro, becoming the latest battery or component supplier to vacate a major Georgia project amid uneven demand for electric vehicles.
“We’re meeting long-term demands by investing to maximize capacity at our aerogel facility in Rhode Island, and supplementing that by leveraging the external manufacturing model that has worked so well in 2024 for our energy industrial products,” said Chief Financial Officer Ricardo Rodriguez in a full-year earnings call.
Aerogel sheets are used between battery cells to prevent what Aspen calls “thermal runaway,” when lithium-ion batteries reach a critically high temperature, potentially bursting into flames.
Working with outside manufacturing partners, initially in China in the near term, then enacting job and spending cuts designed to save $35 million per year, Aspen is shoring up its balance sheet and “accelerating our path to profitability,” Mr. Rodriguez said.
The move means the 250 jobs promised when the Massachusetts-based company announced its location in Bulloch County in 2022 will never materialize.
“The company will be assessing options to derive value from the assets in Statesboro, including relocating some equipment to upgrade and expand its existing plant. This path requires minimal capital,” the news release reads.
The news comes a week after Freyr Battery, a Norwegian investor, also pulled the plug on a $2.6 billion Georgia plant in Coweta County.
The Statesboro Herald reported that the Development Authority of Bulloch County will be looking to activate clawback measures to recoup taxpayer funds spent on the 90-acre site.
The plant was set to be located in what is now Bruce Yawn Commerce Park, the former Southern Gateway Commerce Park, which is now home to two Korean suppliers to the Hyundai Meta Plant in nearby Bryan County — Ajin Georgia and SECO Ecoplastic. Combined, these two investments total more than $500 million.
Tentatively approved in October for a massive loan by the Biden administration’s Department of Energy to support the Georgia plant, Aspen instead opted to forgo the debt to reduce external obligations even as it has scrambled to ramp up production overall.
“It feels great to not take on an incremental $671 million of debt on the balance sheet, and to still be able to fulfill all the expected demand,” Mr. Rodriguez said.
That’s a different tune than Aspen executives were singing in October, when low-cost capital was seen as vital for a plant poised to receive an outpouring of $1 billion over multiple phases reaching 500,000 square feet.
Georgia Gov. Brian Kemp, whose office previously incorporated Aspen into roundups about record investment hauls, has decried the picking of “winners and losers” by the government in the EV space, even as federal support has proven critical for investors in the state.
In the coming quarter, Aspen projects a possible “low point” for the company’s EV thermal barrier business, as General Motors, whose Ultium platform counts Aspen as an exclusive supplier, clears out finished-vehicle inventories that were built up in 2024.
But longer-term, the company is optimistic, having landed deals with six OEMs including GM, Toyota and Valmet, a Porsche supplier. It was set to supply Audi and Scania through a deal with Northvolt, the now-bankrupt Swedish battery producer, and is looking into “plan B” options to fulfill that demand.
“Going forward, we are confident that electric vehicles will be the choice of a growing number of car buyers, and that energy and power generation will be important macroeconomic drivers, and we have an important role role to play in both,” said President, CEO and Chairman Don Young.
Indeed, the news that Plant Two, as Statesboro was called, would be canned came in a generally upbeat news release: Aspen swung to a narrow profit on $452.7 million in annual revenue, a 90 percent increase from the previous year.
As early as 2023, the company had decided to delay construction on the plant in Register, 60 miles west of Savannah, “pre-empting a reset in EV demand expectations,” while experimenting with contract manufacturers.
When outside suppliers proved sufficient enough to support bids for new contracts, it was a “no brainer” to avoid the large capital outlay, Mr. Rodriguez said.
“We can more modularly build up the supply source for that — we would not have gotten awards last year and this year if customers were not OK with that,” Mr. Rodriguez said.
Aspen’s PyroThin thermal barrier recently won a Volvo Truck contract that the company expects to add $45 million in revenue per year when it becomes active.
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